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Getting Ready for Bitcoin Halving 2024: Top 10 Burning Questions Answered

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2023-11-30
Getting Ready for Bitcoin Halving 2024: Top 10 Burning Questions Answered

The next halving of Bitcoin is getting nearer as the day goes by. While we are doing the halving countdown, let's take a look at some popular questions to know Bitcoin and this halving event better.

1. What is Bitcoin halving?

Bitcoin is often called “digital gold” because, just like gold, there's a limited supply. Miners are the ones who dig for this digital gold by solving complex mathematical puzzles, and they're rewarded with new BTC for their efforts. This reward does not only serve as an incentive for miners but also acts as a way to introduce new BTC into circulation.

Now, here's where the magic of Bitcoin halving comes in. Roughly every four years (or every 210,000 blocks mined), the reward that miners receive is cut in half. Hence, the term "halving." This reduction in rewards is hard-coded into the Bitcoin protocol, making it an essential part of the system.

2. When is the next Bitcoin halving day?

The 2024 halving will happen at 840,000 block height (the number of blocks mined), which is going to happen between April 25th and May 8th, 2024. Here's a timeline of Bitcoin halving events:

Event

Date

Block Height

Reward per block

Bitcoin was born

January 2009

Genesis block

50 BTC

The first halving

November 2012

210,000

25 BTC

The second halving

July 2016

420,000

12.5 BTC

The third halving

May 2020

630,000

6.25 BTC

The fourth halving

April - May 2024 (approximately)

840,000

3.125 BTC

The fifth halving

2028 (approximately)

1,050,000

1.5625 BTC

3. Why does Bitcoin need to go through halving?

The Bitcoin halving influences its supply and price; as rewards for mining are halved, fewer Bitcoins enter circulation, driving up value due to scarcity, similar to digital gold. This mechanism, envisioned by its creator, Satoshi Nakamoto, is a hedge against inflation, unlike traditional currencies, ensuring Bitcoin's rarity and value over time.

Moreover, halvings incentivize miners to enhance efficiency, bolstering network security. Each halving also potentially increases the value of mining rewards, aligning with Bitcoin's rising market price. Additionally, by spacing out the mining rewards, Bitcoin’s longevity and stability are safeguarded, ensuring a controlled and sustainable creation of new Bitcoins.

4. What are the general responses of Bitcoin holders towards halving?

The 1-year HODL chart below shows the number of Bitcoin holders who have been holding onto their Bitcoin for a year or more, which has risen significantly from 53.5% in July 2021 to 70.2% as of November 2023.

This shows that a large portion of them are showing confidence by holding onto their Bitcoins for an extended period, and many are waiting for the next halving.

Getting Ready for Bitcoin Halving 2024: Top 10 Burning Questions Answered image 0

The wave shows many Bitcoin holders are on HODL mode (Source: bitbo.io)

5. What is the highest price Bitcoin has ever reached in history?

According to coingecko.com, the ATH of Bitcoin was US$69,044.77 on 10 November 2021, which is around 1.5 years after the 2020 halving.

6. Why are miners still mining even if they are receiving lesser Bitcoin after every halving?

As mentioned above, each halving also potentially increases the value of mining rewards, aligning with Bitcoin's rising market price.

Aside from getting Bitcoins as rewards, miners can also receive transaction fees every time a user sends crypto to another wallet, which needs miners to validate the transaction. As for huge mining companies, they can even do more, such as launching an initial public offering (IPO) and selling shares to the public to support their operations.

Beyond financial incentives, some miners are driven by the goal of contributing to the Bitcoin network's security and decentralization.

7. What happens when Bitcoin reaches its maximum supply of 21 million?

Once Bitcoin reaches its maximum supply of 21 million, expected around 2140, miners will no longer receive new Bitcoins as block rewards; their income will solely come from transaction fees. This shift could impact mining profitability, potentially leading to a consolidation of the mining industry. The fixed supply might also intensify Bitcoin’s scarcity, influencing market dynamics like price volatility and investor behavior.

8. Will the halving this time be different?

Usually, the price of Bitcoin should go up after halving due to the scarcity effect. The 2024 halving could be different than in the past: More investors will notice the opportunity since Bitcoin is getting more exposure around the globe.

For instance, the recent news on Blackrock filing Bitcoin ETF may result in attracting bigger crowds to invest in Bitcoin.

9. Is it hard for beginners to purchase Bitcoin at the moment?

You don't need to buy one whole Bitcoin to consider it as an investment. Instead, you should take the potential returns on investment into consideration.

Begin with a small amount and only use money you're fine with losing because Bitcoin, as well as other cryptocurrencies, is a high-volatility investment. If you want to know more about investing in Bitcoin, take a look at our beginner's guide.

10. What are the other coins that go through halving in crypto?

Several other cryptocurrencies, inspired by Bitcoin's model, also undergo a process similar to Bitcoin's halving, including:

Litecoin (LTC): Often referred to as the silver to Bitcoin’s gold, Litecoin undergoes halving events approximately every four years, just like Bitcoin. The halving reduces the rewards for mining Litecoin blocks, with a similar intent to create scarcity and control inflation.

Bitcoin Cash (BCH) Bitcoin SV (BSV): They are the hard forks of Bitcoin, hence they also have a halving mechanism.

Dash (DASH): The halving effect in Dash isn’t as drastic as Bitcoin’s. This reduction is more gradual, decreasing at a rate of about 7.14% each year.

Zcash (ZEC): Zcash also has a halving event, which occurs approximately every four years. This reduces the mining rewards by half, similar to Bitcoin's halving process.

No one can tell what will happen exactly when halving 2024 comes. But with the timer of halving countdown ticking closer, it is up to you to decide whether this will be a lifetime opportunity to make a change. With extensive trading features you can choose from, Bitget helps you to dive into the cryptocurrency trading world with ease!

Become a Bitgetter and trade Bitcoin (BTC) today!

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Disclaimer: The opinions expressed in this article are for informational purposes only. This article does not constitute an endorsement of any of the products and services discussed or investment, financial, or trading advice. Qualified professionals should be consulted prior to making financial decisions.